By Dan Primack
May 7, 2012

FORTUNE — The new Fortune 500 came out this morning, with lots of familiar names up top (Exxon Mobil, Wal-Mart, etc.). One company you won’t see, however, is private equity firm Kohlberg Kravis Roberts & Co. (KKR), which last year came in at #256.

At the time, I wrote that KKR shouldn’t have made the list in the first place (a sentiment shared by the firm itself). Its inclusion was the result of an accounting oddity, by which KKR’s entire “total investment income” (realized and unrealized gains/losses) was included in Fortune’s calculations, even though the firm itself was only entitled to a small fraction of it (the rest going to limited partners in KKR funds).

In 2010, KKR reported around $9.2 billion in total investment income and $435 million in fee income. That’s how it hit #256. For 2011, fee income rose to $723 million but investment income dropped to $1.45 billion – basically due to a lower level of appreciation in the firm’s private equity portfolio.

For context, The Blackstone Group (BX) — a larger firm than KKR by all accounts — didn’t make the list because it doesn’t consolidate gains from all of its funds.

Most companies celebrate when they make the Fortune 500, and fret if they fall off of it. KKR, however, didn’t want to be there in the first place — likely because it knew the stay would be a short one. Not a positive or negative reflection on the firm, but rather an illustration of how private equity accounting/valuations are difficult to reconcile with more traditional listed issuers.

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